Moderna Stock Forecast & Analysis: Is MRNA a Buy?

Written by Sean GraytokUpdated: 8th May 2022
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Our Moderna stock forecast will examine how the company is leading the ‘Biotech Decade’ that will impact industries beyond health care, including food, materials, and electronics.

But does that make Moderna stock a buy? Let’s find out. 

Moderna Stock Forecast: Background 

Moderna is a Massachusetts-based biotechnology firm that uses mRNA to deliver transformative medicines.

Moderna believes mRNA is the ‘software of life.’ Just like software programs tell computers what to do, mRNA tells our bodies what to do – except instead of moving bits around, mRNA moves atoms around.

However, Moderna is different from the typical biotech company that develops a single asset (drug, vaccine, etc.) with the hopes of pawning it off to big pharma.

Moderna invested heavily in the pipeline of drug development with an Artificial Intelligence -first approach, allowing it to automate certain steps and get to market faster. It can now apply its “bio platform” to create all drugs instead of just one.

Additionally, Moderna is fundamentally a different company following the COVID-19 pandemic — it has become a fully integrated drug company.

Moderna Stock Forecast: Investment Potential

#1. The Covid Catalyst

Moderna is fundamentally a different company after the launch of its mRNA COVID-19 vaccine.

Moderna would make a therapeutic and partner with big pharma companies like AstraZeneca or Merck Prior to the pandemic.

Following the launch of the given therapeutic, Moderna would receive a revenue share but never benefit from direct sales.

This is no longer the case — the COVID-19 vaccine increased product sales from $0 in Q1 last year to $1.7 billion in Q1 sales this year.

Moderna is now a fully integrated drug company, differentiating it from traditional big pharma companies and other fast-moving biotechs companies. 

While Moderna will continue to partner with major pharmaceuticals, it no longer is exclusively dependent on them.

Moderna can develop the tech and sell the tech — making it the Disney of biotech (more on this later).

#2. Moderna’s BioPlatform & mRNAaaS

We’re joking with the mRNA-as-a-Service, but only to a certain extent.

Most biotechs have a single, specific asset (drug) that they try to sell to a big pharma distributor, like Pfizer.

Moderna approached the biotech opportunity from a different perspective and invested in creating and delivering therapeutics, so the only variable that changes is the mRNA sequence coded from drug to drug.

Compared to individual drugs, investing in the process creates major leverage for Moderna today, where it sees disproportionate outputs given the inputs.

This leverage is how it created the COVID-19 vaccine in such a short period — when the race began, Moderna was already ahead of the pack.

Moderna’s bio platform streamlines drug development because it can scale faster and be easily applied to many different diseases. Rinse, wash, and repeat.

#3. The Disney of Biotech

Ok, let’s get back to the Disney (DIS) analogy — Disney creates and sells its intellectual property, hoarding all of the profits.

This is its advantage over Netflix (NFLX), who is forced to bid on IP with HBO, Amazon (AMZN), and Apple (AAPL) and pay major premiums.

Moderna is like Disney — it has the means to create its own tech and sell it directly, compared to Pfizer, who is forced to share its COVID-19 vaccine profits with BioNTech, its ‘IP creator.’

Side Note: To be fair, Netflix is starting to create wildly successful original content, so this analogy isn’t perfect. If you prefer, think of the Netflix prior to House of Cards when it didn’t make its own content.

There are many moving pieces in this industry, but Moderna is vertically integrating at an impressive rate.

#4. Future mRNA Biotech Applications

We’ve only had the internet for 40 years. And the iPhone for 13 — these technologies are still very new to us. It’s only a matter of time before they are aggressively applied to biology, at scale.

Computational power is one of the limiting factors in the biotech space. As it inevitably increases, anything with organic or inorganic components could be augmented or replaced by synthetic biology.

Biotech applications will make our supply chains more predictable and sustainable. Growing things like food and lumber in a laboratory reduces supply chains’ complexity, resulting in more productivity.

Some of these applications are already happening, but Moderna’s tech will allow them to happen at scale.

Moderna’s bioplatform is pulling forward growth in all areas of biotech, including genome editing, gene delivery, protein engineering, and more. Their applications will not be limited to vaccines.

Moderna’s total addressable market will become comically large.

#5. Healing to Upgrading

This section is less specific to Moderna and more of a comment on how the company fits into humanity’s obsession with endless growth.

In the 2017 book Homo Deus, author Yuval Noah Harari claims no clear line separates healing from upgrading.

He writes, “When you develop bionic legs that enable paraplegics to walk again, you can also use the same technology to upgrade healthy people. When you discover how to stop memory loss among older people, the same treatments might enhance the memory of the young.”

Harari points to other notable examples in history:

  • Modern plastic surgery was born in WWI when Harold Gillies began treating facial injuries in the Aldershot military hospital
  • Viagra began as a treatment for blood-pressure problems, then Pfizer realized it could be used to combat impotence

Venture capitalist Josh Wolfe calls this ‘directional arrows of progress,’ which explains how technology becomes more efficient as it evolves, reducing entropy and carrying more information content in the next device.

This concept is thriving in the biotech space thanks to companies like Moderna. While it’s currently focused on healing, history tells us that upgrades will come soon.

According to Harari, “Once you achieve a momentous breakthrough, you cannot restrict its use to healing and completely forbid using it for upgrades.”

Moderna Stock Forecast: Moat

Moderna has built an effective moat by investing billions in industrializing its process of creating mRNA medicines.

The following is a crude estimation of these differentiators:

Technical Hurdles + Bioplatform

Moderna’s automated design pipeline, or bioplatform, is a key advantage over other biotechs that have to make each new drug from scratch.

The proof is in the pudding — Moderna currently has 9 vaccines and 13 medicines across four therapeutic areas, compared to the average biotech that has one or two offerings.

So, what are the technical hurdles that Moderna has overcome that separate it from the rest?

Moderna makes mRNA that (1) your body doesn’t reject and (2) gets delivered to the right place.

If your body rejects the foreign mRNA that is injected into the body, your immune system will destroy it before it can deliver its message.

Moderna solves this problem by effectively ‘silencing’ the mRNA to the immune system and has since licensed this intellectual property.

After solving the rejection issue, Moderna discovered ways to improve the delivery methods of mRNA so its technology could scale.

These improvements were made in its proprietary lipid nanoparticles or the fat that protects the mRNA as it gets to where it needs to in the body. Moderna also mitigated the side effects commonly associated with lipid nanoparticles.

These are both capital-intensive breakthroughs that put Moderna ahead.

Remember, Moderna is essentially coding in the drug design phase. And it’s at scale.

Like other software companies, those with the most access to data have an edge. In Moderna’s case, that data is DNA.

Moderna Stock Forecast & Analysis: Earnings 

Moderna reported fourth-quarter 2021 financial results on February 24, 2022 — here are the highlights:

  • Adjusted EPS: $11.29 vs $9.90 expected
  • Revenue: $7.2 billion vs $6.78 billion expected 
  • Net Income: $4.9 billion

The company also raised its 2022 guidance for Covid vaccine sales by $2 billion. 

Moderna’s Chief Medical Officer Paul Burton believes a booster that targets both omicron and delta will be needed. 

Shares rose as much as 11% after the call. 

Moderna Stock Forecast: The Competition

The Biotech Decade is upon us — here are the companies that will compete with Moderna in the coming years:

  • Pfizer (PFE)
  • Johnson & Johnson (JJ)
  • BioNTech (BNTX)
  • Amgen (AMGN)
  • CRISPR Therapeutics (CRSP)
  • Agios Pharmaceuticals (AGIO)
  • Vanda Pharmaceuticals (VNDA)
  • Deciphera Pharmaceuticals (DCPH)
  • Curis (CRIS)
  • CureVac (CVAC)
  • Gilead Sciences (GILD)
  • Regeneron Pharmaceuticals (REGN)
  • Vertex Pharmaceuticals (VRTX)
  • Novavax (NVAX)
  • Novartis (NVS)

Moderna Stock Forecast: The Risks

#1. Making Drugs is Hard

Making drugs comes with biological variables that we might just not understand yet.

Moderna will pursue therapeutics that ultimately fail to no fault of Moderna, but to biological unknowns and limits in computing power.

Moderna can only de-risk new markets so much. There will inevitably be failures on the path to curing cancer and viruses.

But it’s unclear how these potential mishaps will affect its stock in the short term.

The stakes are different in this industry — and the potential strides forward cannot happen without calculated risks.

#2. Next-Gen biotechs develop something better than mRNA

There’s a possibility that a next-gen biotech develops something that does mRNA things better than mRNA.

For example, a company called Strand Therapeutics is using self-amplifying tech to create a longer therapeutic window than cell therapies currently offered by Moderna and BioNTech.

According to Kyle Blankenship of EndPoints New, Strand is using “genetically programmable logic circuits” to allow its mRNA drugs to enter a specific cellular environment and turn protein expression on or off depending on a series of biomarkers.

This is still in the world of mRNA — and our money is on Moderna to lead all-things mRNA — but it’s an “arrow of process” example that next-gen biotechs are developing.

Moderna Stock Allocation in Your Portfolio

This section might help you decide on the right amount of mRNA stock to add to your portfolio if any:

  • Will next-gen biotechs create something that is better at doing mRNA things than mRNA?
  • Can Moderna effectively de-risk new verticals before investing heavily in them (like vaccines for rare diseases)?
  • Is Moderna’s moat from a technical perspective large enough to fend off other mRNA-focused biotechs?
  • How far off are the future applications of mRNA, such as food, materials, and electronics?
  • Will these future applications get to scale to the degree that they positively impact MRNA’s stock price?
  • Are the technical and biological risks inherent to Moderna’s business too risky for your portfolio?
  • Will Moderna’s stock outperform bitcoin over the next ten years?
  • Are biotech ETFs a better way to get exposure to the space?
  • Can Moderna deliver on another therapeutic like it did with the Covid-19 vaccine?
  • Can Moderna compete with other fully integrated drug companies?

If mRNA falls 40% and you aren’t buying more, consider owning a benchmark fund like the Vanguard S&P 500 Index ETF (VOO) or Nasdaq-100 (QQQ).

Moderna Stock Forecast: FAQs

Why is Moderna stock dropping?

Moderna stock could be dropping for a variety of reasons. However, if you zoom out, you’ll see the Moderna stock is up nearly 300% in the last year.

Is Moderna stock a buy?

Moderna stock is a buy if you believe its bioplatform is a competitive edge against other biotechs and big pharma alike. Alternatively, Moderna stock is a buy if enough other people think it’s a buy.

Should I buy BioNTech (BNTX) stock?

BioNTech stock is up more than 200% in the last year, thanks to its role in the Pfizer vaccine. BioNTech is one of the premier biotech companies on the market.

What is the best biotech stock?

Here are a few examples of what many consider to be the best biotech stocks:

  • Moderna (MRNA)
  • CRISPR Therapeutics (CRSP)
  • BioNTech (BNTX)
  • Vertex Therapeutics (VRTX)
  • Amgen (AMGN)
  • Novavax (NVAX)

Bottom Line: Moderna Stock Forecast

It’s hard to imagine a world where we harness the full potential of mRNA without Moderna playing a pivotal role.

The topics discussed in this article will become less science fiction and more non-fiction by the day — thanks to companies like Moderna.

Keep Reading:

A special thanks to Patrick O’Shaughnessy, Jesse Pujji, Matthew Harrison, Jason Kelly, and the Colossus podcast network for the information and inspiration that made this article possible. Listen to their podcast together Moderna: The Software of Life for more information.

This article is for informational purposes only, and it is not intended to be investment advice. Read our editorial guidelines and public equities research methodology to learn more about how we researched Moderna stock.

Sean Graytok
Sean Graytok

Sean Graytok is our Co-Founder and leading expert in investing and financial management. His work has been cited in leading industry publications, such as InvestorPlace and Business Insider. Sean is interested in the people and technologies that are improving the world.